Peter, The real question here becomes whether the dividend income which is reinvested is taxable in your hands in your jurisdiction and to what extent. This will likely depend on whether the company pays its dividends out of taxed or untaxed profit. Most companies would be expected to pay out of taxed profits depending on the jurisdiction's rules and then the rules on income taxation in that jurisdiction Income:taxable and Income:Nontaxable categories with appropriate sub accounts. It may be wise to provide Income:Dividends And Income:DividendsReinvested as separate categories depending on how your jurisdiction treats them for tax purposes. In my casein Australia there is no tax advantage is dividend reinvestment to the holder.
In Australia, for example, we are only taxed at the difference between our marginal tax rate and the company tax rate for dividends where the company has paid tax on the dividends before distributing the dividends. We receive what is called a franking credit for the company tax paid, which is used as an offset against any personal income tax on the dividend income. If the dividends are paid out of pretax profits at the company level, then we receive no franking credit with our dividends and pay the full marginal rate on the dividends. To complicate it further some stocks can have a franked component and and unfranked component although that is now very uncommon. In either case you would record the income as Income:Dividends but we could potentially have a further sub-account for franked and unfranked dividends. ----- David Cousens -- Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
